New Delhi: Reserve Bank of India (RBI) Governor Raghuram Rajan said on Monday that there was a need to change the appointment process at management level in public sector banks to make it more transparent. The Central bank is in talks with the government to improve functioning in public sector banks, Rajan told at a banking conference.

Rajan further said that problems have emerged recently in bank scandals due to the outsourced project evaluation. This change is need of the hour to control such mismanagement, added Rajan.

The RBI Governor called for more operational freedom to state-run banks and said, “The recent scandals call for better internal evaluation of lending process; banking must become more engaged and informed.”

Applauding the NDA government’s 'Jan Dhan' scheme, Rajan said, it is a good scheme; its target should be universal reach and not speed and numbers.

He pointed out that dip in IIP shows recovery is still uneven and its time government de-regulates diesel prices in the wake of falling global crude oil prices.

Talking about the inflation, Raghuram Rajan said that inflation in Asia's third-largest economy was still high and there was no point in cutting interest rates to see inflation pick up again.

The Central bank wants to bring down interest rates when it is "feasible", Rajan told.

Retail inflation, which the Central bank tracks for setting lending rates, edged down marginally to 7.8 percent in August from 7.96 percent a month earlier, helped by slower annual rises in prices of fuel and clothes.